what's up whatsapp —

Facebook buys WhatsApp for $16 billion

If you can't beat 'em, buy 'em.

According to an early report from Bloomberg News reporter Sarah Frier, Facebook is set to buy WhatsApp for $16 billion. An SEC filing confirms the acquisition for $4 billion in cash to WhatsApp's security holders, along with $12 billion in Facebook stock and an additional $3 billion in Facebook stock that will vest over four years.

WhatsApp has been one of a handful of booming messaging apps that has grown especially large in the last year (GroupMe, WeChat, Kik, and Line are others). In December, the app was reported to have over 400 million monthly users, and Facebook now reports that the service has 450 million. Meanwhile, Facebook maintains roughly 1.2 billion as of last October.

Facebook has yet to release usage numbers for either its messaging feature on the whole or its dedicated Messenger app. The Verge noted in December that it was "telling" that few other messaging apps release their usage numbers like WhatsApp does, which suggests its user base dwarfs its competitors.

The acquisition follows Facebook's recent failure to buy Snapchat, another messaging service that focuses on ephemeral picture messages, for $3 billion in cash.

In its press announcement, Facebook founder Mark Zuckerberg stated that WhatsApp is "on a path to connect 1 billion people." Per the post, Facebook will run WhatsApp similar to the way it runs Instagram, which is to say it will be maintained as a separate property for the time being. However, Facebook and Instagram have been inching slightly closer to one another in functionality and design, suggesting that independence can't be guaranteed. For now, "WhatsApp's core messaging product and Facebook's existing Messenger app will continue to operate as standalone applications."

Casey Johnston
Casey Johnston is the former Culture Editor at Ars Technica, and now does the occasional freelance story. She graduated from Columbia University with a degree in Applied Physics. Twitter@caseyjohnston

I hate this. I use WhatsApp to talk to relatives overseas. Looks like we'll have to find an alternative...

I've used Viber and Voxer with success. Going to try Telegram next as I've heard good things about file transfer speed and I like their perceived ethos, certainly not going to be using Whatsapp any more, that's for sure.

If you had a time machine and went back to 2005, and told the guys who run Nokia that by 2014 an instant messaging app with very little revenue would worth more than twice their gigantic highly profitable phone business those Nokia guys would have thought you were completely freaking nuts.

The day Instagram integrates with Facebook as one interface is the day a lot of people stop using Instagram (and I barely use Facebook anymore as it is). Facebook grew so big, so fast because it was cool for young people. Then their parents started joining and kids started looking for ways to share socially in a separate environment, which is part of why Instagram started blowing up. Get parents and grandparents commenting on Instagram pictures and they will start looking elsewhere (Snapchat is already filling part of that role for some younger kids). Facebook is no longer cool or relevant for young people and instead is tolerated as the easiest way to keep in touch with family members and friends who aren't on Twitter. Facebook apparently is trying to buy up these social networking apps because they still have that element of hot social phenomena but what they're doing in the process is killing what attracts people to them in the first place.

I guess you can't argue with statistics and 1 billion users certainly is impressive but I just get this impression that people are only using Facebook out of necessity and not because they want to. These acquisitions are like a 30-something desperately trying to hold on to what made their twenties fun. Just kinda sad.

If you had a time machine and went back to 2005, and told the guys who run Nokia that by 2014 an instant messaging app with very little revenue would worth more than twice their gigantic highly profitable phone business those Nokia guys would have thought you were completely freaking nuts.

Sure, but what does that have to do with the price? I think the 'time machine' part would qualify you for 'completely freaking nuts'.

LOL. I use Wechat and Whatsapp, one for friends in China and the US, the other mostly for people in HK/Japan.

WeChat is simply, well, better. More ways to add friends, better friend management system, an almost unlimited number of emoticon packages.etc It's also completely free, while Whatsapp requires a subscription fee after the first year. All the people I know who use both prefer WeChat, and I know a number of people incredibly hostile to technology using WeChat, such as some of the older professors at the university I work at.

I don't understand why any company would pay $16 million for the app, let alone 16 billion. As someone mentioned above, that's about $3 per user, most of which just use it for the occasional message.

It couldn't last, sadly. Whatsapp had no real revenue, and no real way to start earning money. When they start charging everybody for using the service, everybody walks. Same if they where to start serving ads.I guess Facebook will enjoy the extra data.

So what good alternatives are there, not (yet) owned by enormous corporations that already know too much about everybody?

Just had a look at telegram - encrypted messages, fast, distributed, open api (love the image they used to describe this feature), free and open source and can send completely secret and self destruct messages. Sounds like the perfect messaging app, and I am certainly going to give it a go.

No, no, no!!!!! FFS, this was the only popular app that did one thing well and with at least some sort of privacy. At the same time it also had a business model that didn't rip off users. Fuck you sincerely, Facebook.

It's astonishing to me how people in this comments thread seem to suddenly think economics and large-scale corporate acquisitions are concepts you can learn by reading a Wiki page or reading the news.

Facebook is not stupid. Whatsapp is not stupid. You may not like either of them, but they know what they are doing. This simplistic thought process that one day Mark just said "hey, doodz, let's buy Whatsapp lololol!" and then they just walked over to the Whatsapp building with a briefcase of cash is utterly retarded.

They'll have all sorts of plans, ideas, agreements, stock-related decisions, and many other changes that happen over a very long period of time. None of this is known to us because they're not details that get told to the public. What makes you think you know what Facebook is going to do with Whatsapp? You have no idea, you just have biases and outrage and other irrelevant ideas. Instagram seems to be doing fine. Snapchat seems to be doing fine. They were acquired a long time ago, yet you the end-user have yet to see any real differences in the way you use those services, right?

Your personal outrage about this is just silly. You're not a multi-billion dollar corporation, that's why the question "Who buys an instant messaging service for 16 billion dollars?" is a stupid question; you don't have 16 billion. You probably don't even have a hundredth of that.

While headlines like these are definitely link-bait, I don't understand to what purpose you think any of your thoughts about this acquisition hold any water.

By all means, share your opinion, but the elitism and arrogance some of you are exhibiting is hilarious.